Getting drugs accepted: who succeeds and why

3 min read
First Published: 
May 2006

Key Learnings contained in this article:

Health economics data play an increasingly important role in getting pharmaceuticals accepted for the drug formularies established by health insurance plans and regulatory authorities.

A drug manufacturer needs to know how to use health economics data to gain acceptance for its drugs. One way is to gather case studies to show which drugs have succeeded, which have not, and why.

According to Jonothan Tierce, of ValueMedics Research, LLC, it is not merely a case of a drug being accepted for reimbursement. Rather, it involves getting the drug positioned favourably in relation to its competitors.

An effective way of gaining specific information about a competitive drug is by telephone interviews with decision makers. Interviews will be unlikely to elicit specific details of a competitor’s contract, but they may reveal, for example, that the manufacturer’s drug has an unfavourable price compared with the competition, or provide useful ancillary information from which the formulary status of other drugs in the class can be inferred. Anecdotal reports from field representatives can also be sources of useful information.

Tierce offers a few rules for gaining favourable positioning:

  • Consider the market. In a crowded market, competitive pricing will be essential. Health economics information showing the benefits of the new product against anything other than other branded competitors will not be influential. If the drug is differentiated from its competitors, by all means show the economic benefits it provides.
  • Provide appropriate tools (cost-effectiveness, but also contracting and budget impact models) for demonstrating a drug’s value to the plan. In an uncrowded market, health economics data can also be used to show that a drug is worthy of Tier 2. Tools should consider the value of performance-based contracting, since most plans are used to this type of arrangement.
  • The best strategies look beyond the plan to the whole market. They create product demand among both patients and physicians. As an example, so-called unbranded campaigns can create awareness of a particular disease state. This can then link patients and physicians to a branded campaign that provides information and promotional coupons for the manufacturer’s drug. If health plans see that demand for the drug is expanding the drug’s market share, they will want to work with the manufacturer to develop mutually beneficial contracts.

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Robert Hand
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